REVVING UP SANTA'S ENGINES

MATTHEW KAUFFMAN; Courant Staff Writer A Bloomberg News report is included in this storyTHE HARTFORD COURANT

Boosted by sales of new cars, U.S. retail spending rose a larger-than-forecast 0.9 percent in November, prompting analysts to predict a strong holiday selling season and continued growth in 2004.

"November's sales illustrate an improving economy and increasing consumer optimism," said Rosalind Wells, chief economist for the National Retail Federation. "Though last month's sales were solid, we expect an even better pace in December, as consumers have yet to complete the bulk of their shopping."

The federation has forecast that holiday sales will increase 5.7 percent from last year, the biggest increase since 1999. By the federation's calculations, sales at general-merchandise stores in November increased 4.8 percent from last year, and rose 0.6 percent from October.

Kevin Keenan, general manager of Westfarms mall, said year-over-year sales figures at his center have been strong since May, and "they're looking really good for November. I'm just seeing some very, very good increases."

Apparel has been particularly strong, Keenan said, with some women's retailers reporting double-digit growth from November 2002. Not all retailers have reported November sales figures, but Keenan said he remains confident that the mall will meet its projection of a 4 to 6 percent increase in holiday sales from last year.

Nancy Murray, general manager of the Shoppes at Buckland Hills in Manchester, said retailers at her mall averaged about a 6 percent year-over-year increase in November sales, with some jewelry and apparel stores reporting double-digit growth. That has stores optimistic about overall seasonal sales.

"The comments that we're hearing from retailers are very positive. They're encouraged," Murray said.

Last month's increase in nationwide sales, to $322.4 billion, followed no gain in October, the Commerce Department said. Economists had expected that retail sales would rise 0.7 percent in November, according to the median of 68 forecasts in a Bloomberg News survey.

Excluding autos, sales rose 0.4 percent for a second month, marking the seventh straight increase, according to the Commerce Department. Economists had expected a 0.3 percent increase.

Beyond auto showrooms, sales were strongest at electronics and appliance stores, which enjoyed a 2.2 percent increase, the most since May.

"We were better than that," said David Sullivan, chief financial officer of Bloomfield-based Bernie's, which has 11 electronics and appliance stores in Connecticut, Massachusetts and Rhode Island.

Sullivan said demand for digital TVs has helped make for a profitable season. "Holiday sales have been very strong -- with the exception of last weekend," when heavy snowfall kept shoppers away, he said.

The Commerce Department report also said sales at clothing and accessory stores rose 1.1 percent, and furniture stores saw a 1 percent jump in sales.

Among the few areas of weakness in November were department stores, which saw a 1.1 percent drop in revenue, and sporting goods, hobby, book and music outlets, where sales declined 0.5 percent. But Murray, the mall manager in Manchester, said her department stores reported strong sales for November.

Robin Reibel, a spokeswoman for Filene's, said the store does not release sales figures, but said, "We continue to be cautiously optimistic about the season."

Overall, consumer confidence is improving as the economy adds jobs, suggesting that spending will pick up heading into next year, some economists say.

"It looks like we are still managing to spend more, even after" the third quarter's gains, said Steven Wieting, a senior economist at Citigroup Global Markets in New York. With consumers still spending and businesses producing more trying to catch up, "expect a real strong first half" next year, he said.

Auto dealers lured more buyers into showrooms last month by boosting discounts and other incentives. Sales at dealerships and parts stores increased 2.6 percent last month, the biggest rise since March, after falling 1.4 percent.

Auto sales might be even stronger this month. Chrysler added no-interest loans for as long as 72 months to all minivans, and General Motors Corp. introduced $750 bonus cash for employees, and $500 for suppliers.

Stephen Gabriel, executive vice president of the Connecticut Automotive Retailers Association, said it has been a "decent" season for car dealers in the state, and said sales throughout the year have been generally good, in large part because of low interest rates.

Although a creep up in interest rates could hurt sales next year, Gabriel said many dealers are taking an optimistic cue from their manufacturers' plans to build more cars. "They haven't retrenched there, so that's a good sign," Gabriel said.

Consumer confidence rose last month to the highest since September 2002 as views about job prospects improved, according to a report from the Conference Board, a New York research group. The economy added 57,000 jobs in November, the fourth consecutive increase, and the unemployment rate dropped to 5.9 percent, the lowest since March, statistics from the Labor Department last week showed.